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SB 1199

Prescription drug cost sharing.

2025-2026 Regular Session Introduced by Akilah Weber Pierson

SB 1199 requires counting all drug-related payments toward a plan or policy's annual out-of-pocket cost-sharing limit, including manufacturer-provided assistance.

Referred to Com. on HEALTH.
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Bill Summary · SB 1199

Summary of SB 1199 (2025-2026) – Prescription Drug Cost Sharing (California)

1) Purpose and Intent

SB 1199, introduced by Senator Weber Pierson, aims to modify how out-of-pocket costs for prescription drugs are counted toward an enrollee’s or insured’s cost-sharing limits under health plans and policies. Specifically, it requires health care service plans and health insurers to count any amount paid toward an enrollee’s drug costs—whether paid by the enrollee, on the enrollee’s behalf, or provided as direct manufacturer support—toward the annual cost-sharing limit and applicable in-network deductible. The measure also establishes penalties for violations and clarifies scope and definitions.

2) Key Provisions and Changes

  • Section 1399.852 (Health and Safety Code) – Prescription drug cost sharing for plans regulated by DMHC:

    • When calculating an enrollee’s annual out-of-pocket maximum or other cost-sharing requirements, a plan must count:
    • Any amount paid by the enrollee or on the enrollee’s behalf for a drug.
    • Any direct support provided by drug manufacturers that is permitted under Division 114 (starting with Section 132000) of the Health and Safety Code.
    • These amounts must be counted toward:
    • The annual limit on cost sharing.
    • The in-network deductible.
    • Applicability and exclusions:
    • Applies to nongrandfathered plans subject to Section 1367.006.
    • Excludes grandfathered plans, specialized plans without essential health benefits, Medicare supplement plans, and certain ancillary products (accident-only, specified disease, hospital indemnity).
    • Definitions:
    • “Cost sharing” includes deductibles, coinsurance, copayments, and similar charges for essential health benefits (per federal CFR 155.20), but excludes premiums, nonnetwork balance billing, and spending on noncovered services.
    • “Annual limitation on cost sharing” aligns with Section 1367.006.
    • “Essential health benefits” aligns with Section 1367.005.
    • Direct manufacturer support: Must comply with limitations in Sections 132000 and 132002.

  • Section 10112.283 ( Insurance Code) – Prescription drug cost sharing for insureds:

    • When calculating an insured’s out-of-pocket maximum or cost-sharing under a health insurance policy, a health insurer must count:
    • Any amount paid by the insured or on the insured’s behalf for a drug, including direct manufacturer support permitted under Division 114.
    • Applicability and exclusions:
    • Applies to nongrandfathered policies subject to Section 10112.28.
    • Excludes grandfathered policies, specialized policies without essential health benefits, Medicare supplement, and certain riders (accident-only, specified disease, hospital indemnity).
    • Enforcement and penalties:
    • The Insurance Commissioner can enforce this section with notice and hearing rights.
    • Administrative penalty up to $5,000 per violation; if willful, civil penalty up to $10,000 per violation.
    • Definitions: Mirrors the Health and Safety Code definitions for cost sharing and essential health benefits, consistent with Section 10112.28.

  • General/Procedural Notes:

    • If a willful violation by a health care service plan, the act contemplates criminal penalties, triggering a state-mandated local program.
    • Reimbursement requirements to local agencies/school districts are addressed; the act specifies that no reimbursement is required for certain mandated costs.
    • Effective date and applicability are shaped by the nongrandfathered status and the relevant sections cited.

3) Who Would Be Affected

  • Health care service plans regulated by the Department of Managed Health Care (DMHC) (non-grandfathered plans under Knox-Keene framework) would be required to count drug-cost payments toward cost-sharing limits.
  • Health insurers regulated by the Department of Insurance (CDI) would have parallel requirements for nongrandfathered health insurance policies.
  • Enrollees/insured individuals who receive prescription drugs, including those who benefit from manufacturer assistance programs, would have their drug-related payments counted toward their annual cost-sharing limits, potentially reducing their out-of-pocket exposure in aggregate.
  • Drug manufacturers offering direct patient assistance would be subject to the same limit considerations under Sections 132000 and 132002.

4) Procedural and Timeline Aspects

  • Status and Schedule:
    • Referred to the Health Committee (as of March 4, 2026); set for a hearing on April 22, 2026 (Action History indicates these dates).
  • Introduced: February 19, 2026; co-sponsored by Akilah Weber Pierson.
  • Fiscal/Local Impact: No broad state appropriation is indicated; local reimbursement provisions are addressed, with the act noting no reimbursement under certain conditions.
  • Enforcement: Admin penalties by the Insurance Commissioner (up to $5,000 per violation; $10,000 for willful violations) for insurers; criminal provisions for willful violations by a plan.

This summary highlights SB 1199’s core aim: ensure that all forms of drug cost support—whether paid by the enrollee or provided as manufacturer assistance—are counted toward annual cost-sharing limits, improving transparency and consistency in out-of-pocket calculations across California health plans and policies.

Compiled from official sources — confirm details with the bill’s official record.

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